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Growth is an inside job!
"Business without profit is not a business any more than a pickle is candy". Charles F. Abbott
Many business owners think of growth as merely an increase in sales revenue. Of course, selling more contributes to expanding a business; however, the internal improvements are just as important. Business owners need to take steps to become more profitable. If you are focusing just on building revenue, you will come up short.
One goal in working with my clients is to get them to realize the potential of their business. In addition, working smart and increasing profit are part of every client engagement. They should also be objectives for your business. Revenue is the top line but it needs to contribute to the bottom line. If your expenses aren't managed, you chisel away at the profit. Eventually all incoming money seeps out. The outcome differentiates between running a real business or just funding a hobby.
Tips on growing a company from the inside out:
Growth should be internal as well as external to maintain control of your business. Otherwise, it is totally at the mercy of outside forces. As you improve profit margins, you have a greater ability of building a sustainable business. As you plan for the future you can take calculated risks and provide a financial reserve for difficult times. Make your growth an inside job and enjoy the candy.
- Have a strategic plan for growth. Expand your markets, offer additional products or services or plan for a strategic acquisition. When you do launch a change in your business, communicate it to your customers and prospects.
- Evaluate your pricing. Don't be afraid to charge more as long as you provide added value. Bundling products/services can be an effective way to package options, thus creating a more profitable revenue model.
- Manage expenses. Cut costs where you can. Make all expenses count. Plan your capital acquisitions when they provide a strategic advantage. Always prioritize spending to that which maximizes value to the business.
- Put the right people in the right jobs. Evaluate the strengths of each key employee. Have them stretch their skills by giving them additional responsibilities which capitalize on their special talents.
- Manage growth. Be prepared for an increase in business. A company could meet an early death by not being prepared for the additional work load. You will need the structure and resources to support getting to the next level without sacrificing quality and service.
- Keep on top of financial reports. Analyze the numbers carefully. When they're off, make the changes necessary for better results each month. Remember the old adage "cash is king" - focus on managing cash flow.